SFE pays US$28 million for OM technology

The Sydney Futures Exchange (SFE) entered a US$28 million, eight-year agreement on Friday to outsource its core clearing technology and operational support functions to Swedish technology vendor OM. The agreement includes US$5 million in capital costs and US$23 million in annual facilities management and software.

OM will develop a new central securities depository system (CSD) and a fixed-income clearing service to replace the SFE's existing Fintracs technology.

The SFE said OM's technology would create a common infrastructure for all SFE-listed derivatives and debt securities in Australia. The agreement will involve a transfer of about 30 SFE staff to a newly formed Australian OM development and facilities management team.

"The creation of a contemporary applications suite, based on global standards and an open architecture, significantly enhances our ability to offer new products and services," said Robert Elstone, SFE chief executive.

ELstone added that SFE's scope to create trading and clearing alliances with counterparts in the Asia-Pacific region will be significnatly enhanced.

OM will also be able to launch its exchange trading and front- and back-office broker solutions on the Sydney platform. Other OM exchange users in the region include Hong Kong Exchanges and Clearing, the Korean Futures Exchange and the Australian Stock Exchange.